​L&Q development down 26% as it pursues de-risking strategy

The number of homes completed by L&Q in the first nine months of the financial year is down 26% year-on-year, the G15 landlord has said.

L&Q, in an unaudited trading update, said it completed 1,410 homes in the nine months to 31 December, compared to 1,902 in the same period the previous year.

Ed Farnsworth, executive group director, finance at L&Q, said: “L&Q has reduced its investment in its development pipeline with a resulting reduction in completions.

“We are seeking opportunities to continue to deliver affordable housing where it does not divert from our strategic aim to derisk and invest in our existing homes.”

L&Q said that its turnover has increased from £761m to £803m along with its operating surplus, which rose 28% from £268m to £342m.

The 109,000-home landlord said it has continued to rationalise stock that is outside of its core geographies or is uneconomic to maintain. Its fixed asset sales increased as a result, generating £102m of EBITDA, up from £72m year-on-year.

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L&Q’s interest cover, as measured on an EBITDA MRI basis, rose from 134% to 170%. However, L&S said it expects this to reduce over the next quarter to 145-155% as it increases investment in its homes and services. Interest cover compares earnings to interest payments and is used as a measure of financial capacity.

Farnsworth said L&Q’s proposed sale of its £58m-turnover private rented sector business Metra Living announced in November will support its strategic objective to simplify its business as well as helping it prioritise its core purpose as a social housing provider and invest more in existing homes.